BANKRUPTCY BILL PUT OFF, AGAIN

THE HARTFORD COURANT

Both chambers of Congress have voted for bankruptcy reform legislation by overwhelming margins, yet the issue is dead for this year.

How can that be?

The Senate version contained language to bar those fined by courts from using bankruptcy to escape court fines. The provision was aimed at anti-abortion militants found guilty of violating laws. There was no such language in the House version of the bill. When it came to a showdown, neither side would bend enough.

So, for the fifth straight year, a sensible change with bipartisan support has died -- this time because of irrelevant language that never should have been part of the bill.

Banks and credit card companies don't get much sympathy from the public, but they have a point in arguing that customers who pile up debts should repay at least a portion of the money if they have the financial means to do so. After all, when some consumers walk away from legitimate debts, others get socked with higher interest rates and fees.

Under present law, it is too easy for people to have their debts dissolved, even when they are working. The proposed measure would have established a means test to force more people to accept a 3-to-5-year repayment plan. The bill protects those with medical hardships and the jobless, as it should.

The legislation has flaws, such as the so-called homestead exemption, which allows wealthy people in some states to keep their mansions even after filing for bankruptcy.

President Bush says he would have signed the measure that died. The legislation is certain to be revived by the next Congress, which should strip out the abortion section, fix the homestead problem and finish the job started in 1998.